Ewing Corporation sold an office building that it used in its business for $883,690. Ewing bought the building ten years ago for $764,084 and has claimed $540,145 of depreciation expense. What is the amount of the §1231 capital gain for Ewing Corporation? 108,029 551,722 margin of error +/-2

Ewing Corporation sold an office building that it used in its business for $883,690. Ewing bought the building ten years ago for $764,084 and has claimed $540,145 of depreciation expense. What is the amount of the §1231 capital gain for Ewing Corporation? 108,029 551,722 margin of error +/-2

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 5BCRQ

See similar textbooks

Related questions

Q: Business K exchanged an old asset (FMV $95,000) for a new asset (FMV $95,000). Business K's tax…

A: When an asset is sold for less than its original value, a realized loss happens; a recognized loss…

Q: During the current tax year, Doug incurs the following deductible expenses: State Income Tax $2,300…

A: The amount of Doug's taxable income is calculated below:Note: Medical expenses over 7.5% of adjusted…

Q: A weekly time ticket for Joyce Caldwell follows: Labor Time Ticket Ticket Number: TT 338 Employee:…

A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…

Q: Brief Exercise 3-02 Vaughn Repair Shop had the following transactions during the first month of…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: K- The following selected transactions occurred during 2024 and 2025 for Arabian Importers. The…

A: Notes Receivable is a ledger used to record when the amount is loaned to others by the organization.…

Q: Sheridan Ltd. had the following share transactions during its first year of operations: 6 Issued…

A: The re-acquisition of shares means repurchasing the company's own stock from existing shareholders.…

Q: Puget Sound Divers is a company that provides diving services such as underwater ship repairs to…

A: Flexible budget is the statement prepared by the entity for the purpose of estimating the fixed and…

Q: Swifty Corporation developed the following information about its inventories in applying the…

A: Lower of Cost Or Net Realizable Value Concept Is An Inventory Valuation Method That Values The At…

Q: Clarissa's gross tax liabilin

A: Lets understand the basics.For determining net liability, lets understand the terms given in the…

Q: Exercise 2-8A (Algo) Supplies and the financial statements model LO 2-5 Pizza Express Inc. began the…

A: Financial statement means statement which shows the financial position as on date and financial…

Q: The CVP income statements shown below are available for Armstrong Company and Contador Comp Sales…

A: DOL is calculated by dividing the contribution margin by the operating margin.DOL=Contribution…

Q: To generate leads for new business, Gustin Investment Services offers free financial planning…

A: Given information:Gustin conducts seminars for groups of 25 individuals.Each seminar costs Gustin…

Q: Whispering Ltd. is constructing a building. Construction began on February 1 and was completed on…

A: Lets understand the basics.Borrowing costs incurred behind qualifying assets needs to…

Q: PC Law Firm provides services for Cougar Capital Corp and bills $100,000 for their services, which…

A: A business may be able to raise money through the issuance of stocks to pay for operations, growth,…

Q: Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs:…

A: FLEXIBLE BUDGETA flexible budget is a budget that is prepared for different levels of activity or…

Q: b. The vehicle cost $82,000, and business use is 100 percent. Year 2023 2024 Depreciation deduction…

A: MACRS stands for Modified Accelerated Cost Recovery System, It's method used in the United States…

Q: Heritage Company uses a job-order costing system to assign costs to jobs. It had no work in process…

A: The cost of goods sold includes the costs of jobs that are sold during the period. The work in…

Q: Using the following data, determine the unit product cost under variable costing. Units produced…

A: The unit product cost under variable costing consists of direct material, direct labor and the…

Q: Word Problem 14-12 (Algo) [LU 14-2 (1)] If you are trying to build credit by using a credit card,…

A: A credit card is a facility provided by the bank to its customers. The benefit is that the customer…

Q: Analyzing Cash Dividends on Preferred and Common Stock Potter Company has outstanding 17,000 shares…

A: The objective of the question is to calculate the total amount of cash dividends paid to each class…

Q: Distinguish between the spot market and forward market for foreign exchange.

A: The objective of this question is to differentiate between the spot market and the forward market in…

Q: In a recent year a car manufacturer sold 217,044 cars. The company budgeted to sell 226,244 cars…

A: In sales price variances, we compare actual results with flexible budget, if actual sales are more…

Q: On December 31, 2024, Perry Corporation leased equipment to Admiral Company for a five-year period.…

A: Lets understand the basics.Leases allow organizations and people to have access to and use assets…

Q: On December 31, 2023, Berclair Incorporated had 240 million shares of common stock and 5 million…

A: Earning per Share ie EPS - It is the ratio between a company's earning and its number of outstanding…

Q: A company uses the periodic inventory system and had the following activity during the current…

A: Company inventory refers to the collection of goods, materials, or other means that a business holds…

Q: 18 19 20 13 14 15 16 17 21 22 23 24 25 26 27 E11 File Paste Home Insert Page Layout X A UP Calibri…

A: Depreciation Expenses incurred on the fixed assets of the company. It is charged due to use, the…

Q: Please proper solution and what is correct option with explanation

A: The objective of the question is to determine the correct statement when variable manufacturing…

Q: Sandhill Company commenced operations on July 1. Sandhill Company uses a periodic inventory system.…

A: The journal entries are prepared to record the transactions on regular basis. Cost of goods sold =…

Q: Margot's Ice Cream operates several stores in a major metropolitan city and its suburbs. Its budget…

A: Variance is the difference in the value of budgeted cost\quantity\price and the actual…

Q: Monty Corporation has 755,000 shares outstanding. The shares have an average cost of $43 per share.…

A: Journal entries are the primary reporting of the business transactions in the books of accounts.…

Q: Perma Weave Textiles Corporation began January with a budget for 22,000 hours of production in the…

A: The disparity between actual variable overhead expenditures and budgeted variable overhead for…

Q: In February 2024, Culverson Company began developing a new software package to be sold to customers.…

A: Research and development cost is the expense which relates to the development and research of a new…

Q: . Assume that Chapman Company acquired Abernethy's common stock for $490,000 in cash. As of January…

A: Consolidated worksheet in accounting is a financial statement that combines the financial…

Q: Vaidean Computing sells merchandise for $6,000 cash on September 30 (cost of merchandise is $3,900).…

A: Journal entries are the foremost reporting of the business transactions in the books of accounts.…

Q: Blossom Inc. mistakenly recorded an EFT payment as $455 that was written for $527 in payment of an…

A: It is a statement drawn up by the business to verify the cash book balance with the bank statement…

Q: Kahlon Company likes to maintain its inventory quantity at the end of each month equal to one fourth…

A: The objective of the question is to calculate the number of units that Kahlon Company needs to…

Q: Larkspur Shoe Store uses the retail inventory method for its two departments: men's shoes and…

A: The cost to retail ratio is calculated as cost of goods available for sale divided by the retail…

Q: E4.5 (LO 1) (Preparation of a Corrected Balance Sheet) Uhura Company has decided to expand its…

A: The balance sheet shows the companies assets and liabilities as on a specific date. The balance…

Q: ou have recently been appointed as auditor to Johnson Plc; a company whose shares are traded on the…

A: A professional issue is a problem or worry that emerges in a certain sector or occupation where…

Q: Current Attempt in Progress For Sheridan Company, variable costs are 70% of sales, and fixed costs…

A: Variable costs are costs that vary with the change in the level of output whereas fixed costs are…

Q: Classification of final goods in management accounting pesperctive.

A: In management accounting, final products refer to the goods or services that have completed the…

Q: Overhead Item Maintenance Power Indirect labor 140,000 Rent 35,000 Next year, Cerium expects…

A: FLEXIBLE BUDGETA flexible budget is a budget that is prepared for different levels of activity or…

Q: Hi-Tek Manufacturing, Incorporated, makes two industrial component parts-B300 and T500. An…

A: Activity-Based Costing (ABC) is a costing methodology that assigns overhead costs to specific…

Q: builder bug company allocates overhead at $9 per direct labor hour. Job A45 requires 5 boxes of…

A: The Total Costs of the job include Direct material, Direct labor and the overhead applied for the…

Q: George and Kenneth borrowed $30,000 on a 7-month, 5% note from Gem State Bank to open their…

A: Journal entry is the first stage of the accounting process.Journal entry is used to record business…

Q: Required information [The following information applies to the questions displayed below.] Annin…

A: Direct material cost is the cost of raw material produced or purchased to produce the final…

Q: Court Casuals has the following beginning balances in its stockholders' equity accounts on January…

A: As per dual concept of accounting, every transaction has dual impact on the books of accounts.The…

Q: On January 1, 2013, a corporation issued $500,000, 6% 5 year bonds for $459,464. The bonds pay…

A: Bonds payable is one of the form of liability being incurred. Regular interest payments needs to be…

Q: 1.A new product, an automated crepe maker, is being introduced ät selling price of RM59 per unit,…

A: The selling price of the product can be defined as the total of target cost and the target income.…

Q: 1. Materials Costing Methods. The Mellan Company began using a new raw material during May, 19-,…

A: FIFO means the item which is received first will be sold out first. LIFO means the item which is…

Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Domestic

Answered
ct Answer
Ewing Corporation sold an office building that it used in its business for $883,690.
Ewing bought the building ten years ago for $764,084 and has claimed $540,145 of
depreciation expense. What is the amount of the §1231 capital gain for Ewing
Corporation?
108,029
551,722 margin of error +/-2

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Meaning of capital gain

VIEW

Step 2: Computation of 1231 gain

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

On January 4, 1986, Rita Racksaw purchased a warehouse for $150,000. In 2020, she sold the warehouse for $107,000. She took $150,000 depreciation under ACRS and straight-line depreciation would have been $150,000. How much and what type of income or gain would Rita have on the sale? $43,000 Section 1231 loss $107,000 Section 1231 gain $107,000 long-term capital gain $107,000 ordinary income
A retail building used in the business of a sole proprietor is sold on March 10, 2021, for $342,000. The building was acquired in 2011 for $400,000 and straight-line depreciation of $104,000 had been taken on it. What is the maximum unrecaptured § 1250 gain from the disposition of this building? a.$400,000 b.$322,000 c.$104,000 d.$26,000
In 1980, Artima Corporation purchased an office building for $400,000 for use in its business. The building is sold during the current year for $550,000. Total depreciation allowed for the building was $390,000; straight-line would have been $360,000. As result of the sale, how much Sec. 1231 gain will Artima Corporation report? O A. $150,000 B. $510,000 C. $398,000 D. $540,000
7) Depreciation Recapture examples: a) Sec. 1250 gains; RE acquired in 2004 at a cost of $1 M; accumulated depreciation through date of sale is $400k; WHAT is the A.B. of the property? i. How do you treat the gain if the sales price is 1. $1.1 M 2. $900k ii. How do your answers change if the asset were held by a corporate taxpayer? HINT: Any other recapture rules apply? 1. $1.1 M 2. $900k b) Sec. 1245 gains i. Textile Corp sold machines A & B this year 1. A cost $180k and has A/D of $180k; sold at $40k 2. B cost $240k and has A/D of $240; sold at $260k 3. How much gain is recognized and what is its character a. А-- b. В-
Towns a machine that was purchased three years ago that cost $180,000 and accumulated depreciation of $43,000 1. What is T's basis on the machine? Under the following scenarios, calculate the 1231 Gain or loss; the amount, if any, of depreciation recapture (indicate whether it is 1245 or 1250 recapture); indicate the portion of the gain or loss that is taxed at ordinary rates and the portion that is LTCG; if there is a loss how much of the loss carries over? (Assume date of sale is today.) 2. Sold the machine for $155,000 3. Sold the machine for $130,000 4. Sold the machine for $200,000
Effect of depreciation on net income Einstein Construction Co. specializes in building replicas of historic houses. Bree Andrus. president of Einstein Construction, is considering the purchase of various items of equipment on July 1. 20Y2. for $300,000. The equipment would have a useful life of five years and no residual value. In the past, all equipment has been leased. For tax purposes, Bee is considenng depreciating the equipment by the straight-line method. She discussed the matter with her CPA and learned that although the straight-line method could be elected, it was to her advantage to use the Modified Accelerated Cost Recovery System (MACRS) for tax purposes. She asked for your advice as to which method to use for tax purposes. What factors would you present for Bree’s consideration in the selection of a depreciation method?
LO.3 Renata Corporation purchased equipment in 2017 for 180,000 and has taken 83,000 of regular MACRS depreciation. Renata Corporation sells the equipment in 2019 for 110,000. What is the amount and character of Renatas gain or loss?
Jerry uses a building for business purposes. The building was purchased on April 1, year 3, for 124,000. It was sold on October 3, year 6, for 200,000. Accumulated depreciation as of the date of sale was 14,000, 4,000 of which was in excess of straight line. How much of the gain in year 6 is unrecaptured Section 1250 gain? a. 4,000 b. 10,000 c. 14,000 d. 100,000